Stock market reacts to Powell

From CNN Business' Paul R. La Monica

Stocks moved modestly (to use one of the Fed's favorite words to describe the economy's growth) once Federal Reserve Chairman Jerome Powell began speaking at an event at the Economic Club of Washington today. The Dow was up a bit at first as Powell talked about the economy but later dipped ever so slightly into the red.

Powell didn't really say anything that he hadn't said previously about the justification for last year's rate hikes, and he didn't give any major hints about the Fed's plans for the future. He reiterated that the Fed does not take political factors into consideration when deciding what to do with rates.

Live analysis: What Powell is saying

1:30 pm: Toward the end of his talk, Powell sought to emphasize the Fed is willing to change its plans -- if needed.

"We're very flexible in adapting our policy if the economy moves, as it often does, in ways we don't expect," he said.

1:14 pm: Powell isn't buying into that 2019 recession talk.

“I don’t see anything that suggests the possibility of a recession in the near term is at all elevated,” he said.

Why? Powell said recent recessions have been caused by the Fed having to “hit the brakes” to combat high inflation or “asset bubbles.” Right now, the Fed doesn’t see evidence of either.

“I don’t see a recession,” Powell said.

However, the Fed chief is less bullish on the world economy. “The US economy is solid. There is good momentum going into this year. The principal worry is global growth,” he said.

1:08 pm: Here's more evidence of Wall Street's focus on the Fed's balance sheet: Powell reiterated that the Fed wants to have its balance sheet "return to a more normal level."

Asked what qualifies for "normal," Powell said "I don't know the exact level."He noted that the balance sheet has declined to about $4 trillion, but that before the 2008 crisis it was below $1 trillion.

"It will be substantially smaller than it is now," Powell said.

Stocks turned negative after the comments, with the Dow recently down about 35 points.

1:05 pm: Powell is sounding cautious about the impact of a prolonged government shutdown.

“If we have an extended shutdown, I do think that would show up in the data pretty clearly,” Powell said.

But he noted that the economic data would also be muddied because the shutdown is impacting the Commerce Department, which operates the Bureau of Economic Analysis and the Census Bureau. Reports like retail sales and GDP could be sidelined.

“We would have a less clear picture into the economy if it were to go on much longer,” Powell said.

12:56 pm: Asked if he's bothered by President Donald Trump's attacks on the Fed, Powell said "no."

"We do not take political factors into consideration in our discussions or decisions at all."

Powell seemed open to, though not enthusiastic, about a potential meeting with Trump.

"I’m not aware of any Fed chair turning down an invitation from the White House, nor do I think that would be appropriate," Powell said.

But when Rubenstein asked if he'd be happy to accept an invitation, Powell simply repeated: "I'm not aware of anyone not accepting it."

BlackRock will lay off 3% of its workforce

BlackRock (BLK), the world’s largest asset manager, plans to lay off 500 employees globally, or 3% of its workforce.

President Rob Kapito detailed the cuts in an internal memo seen by CNN Business.

"As our industry undergoes an era of significant change, we can continue to outperform by building our business in high-growth markets," he said in the note sent this morning. "But executing on this strategy requires that we move decisively to refocus resources where the impact will be greatest."

Even after the cuts, Kapito said BlackRock’s headcount will be 4% higher compared to a year ago. The company will report its earnings from the final three months of 2018 next week.

11:35 a.m. ET, January 10, 2019

Midday market update: Dow erases early losses + Oil turns positive

From CNN Business' Matt Egan

Markets have bounced back from an early selloff:

As of late morning, the Dow was trading with slight gains. That reverses a decline of as much as 176 points.

Thursday’s early slide was mostly driven by poor earnings and guidance from major companies and waning optimism about US-China trade talks. US oil prices were also lower after eight straight days of gains.

Macy’s plunged 18% after posting gloomy holiday sales and slashing its outlook, leading a bloodbath in the retail space. American Airlines tumbled 10% after dimming its guidance.